Regardless of what founders may share, every B2B startup wants a big brand name on their investor deck – it’s not just for social clout, but for what it represents: being trusted, secure and stable enough to be chosen by an industry leader, who hopefully has the potential to be a six or seven-figure client.
However, not every product and not every B2B company is suited to servicing large enterprises. But if you have an innovative idea that you know will work for a large corporate, there are a couple of challenges you have to navigate around first.
AT&T CASE STUDY
Whistle was approached by an entrepreneur who had an innovative, disruptive enterprise solution that had the potential to change the way large scale businesses operate.
The main target audience from the test they had, were large enterprises that could save these companies millions of dollars by using the technology solution they developed. The innovative technology cut down a lot of technical needs that were required by the customers.
One of the use cases showed that this solution was ideal for call centres. Whistle started looking for companies that had call centres where reducing wait-time and increasing the customer support element was really valuable and helpful. One of those identified was AT&T.
Whistle reached out to a person in AT&T’s innovation department who came via a referral.
With an ally on Whistle’s side, and who was tasked to find business innovations, our contact was open to meeting and was privy to the pain points in the organisation.
Armed with what information they were able to share, our client was able to craft a compelling message for the pitch. AT&T’s innovation person guided Whistle through the initial stages and the pitch that included pricing. We were able to fit into AT&T’s world seamlessly and not jigged to fit ours. What worked in our client’s favour was the real benefit and we could quantify the real cost of the situational problem for them, which was how much time and money was being lost as a result of poor customer support. We alleviated the problem by shortening the length of wait time for AT&T’s customers. Everything our client spoke to AT&T about was built around this pain point.
Whistle together with the client built ROI presentations for AT&T and demonstrated those pain points and then weighed them up against the investment.
AT&T invested in a trial period and during the course of the relationship, a 7-figure contract deal was concluded through fostering the relationship and mapping the way through the organisation for a continued period.
Here’s Whistle’s process to land a whale…
1. Who are you?
The first challenge that every B2B startup will face and the most difficult to overcome is anonymity.
Just getting through to a massive company is difficult to do because they get pitched and approached all the time for their business, by many well-known companies, let alone early-stage startups.
By nature, large enterprises are very busy with deadlines and they are not willing to take a chance normally on the unknown. There is a saying, “no one’s going to get fired for choosing Microsoft.” When you’re trying to pitch your solution to them, you have to bear this in mind and get over the hurdle as soon as possible. A large part of this process involves researching the enterprise well and understanding or having close enough assumptions to validate why you’re reaching out to that specific company and that specific department (the company within the company).
Despite the understandable eagerness to share why you’re wonderful, your entire approach should actually be based on how you can possibly service THEIR needs and not on what you do, or who your founders are – it just isn’t interesting enough, until you can show someone what you can do for THEM.
If you do manage to attract and engage the contact, you should already have a clear path of progression for discussions and where the meeting will lead them. Time is a precious commodity and is becoming scarcer with the changes in work, meaning that there are more expectations that a meeting will have a clear agenda, outcome and next steps before being set. This also helps the prospect understand and share why they are giving up their time to talk to you and not to do one of the hundreds of other tasks that are set for them and which they are measured directly for.
2. Build your networks
The only real way for a B2B startup to get beyond the initial hurdle of anonymity, if you have a limited budget and your stellar reputation does not precede you, will likely be to rely on referrals and networks. If you’re funded, this is usually easier, as your VC will ideally be looking to get you in front of as many brands as possible.
It’s recommended that where possible, you should look for personal introductions. Often, founders are surprised to learn the power of their social network. Friends and acquaintances who you may have known for years, suddenly pop out of the woodwork as directors and senior vice presidents of large companies – it’s an interesting phenomenon!
Getting a name or phone number for your B2B company is great. But, just like in dating, it more than likely doesn’t turn into a face to face meeting, unless you can get past all the natural barriers of unanswered calls and emails and demonstrate a clear value proposition to your prospective client. Instead of settling for names and numbers, ask your referee for a personal introduction and give them enough context to work with as to why you feel like this would be beneficial to the prospective client.
It’s highly unlikely that you’ll get through to a large corporate on the back of running online ads or via cold calling alone without anything of substance guiding that conversation and enough of a name in the industry. If you are embarking on a campaign to attract large clients, make sure you have the referrals, testimonials and talk tracks updated on both your website and on popular review sites. They will do their research on you, so make sure that there’s something to discover.
3. Find the innovation team
A B2B start up should use channels that a corporate has already developed to your advantage.
Many large companies suffer from “ocean liner syndrome” – it’s hard to make a drastic turn and any degree off course can result in a massive change in direction. Hence, once a company gets large enough, they become very inflexible, which is why large companies purchase startups often. Startups are usually seen as R&D centres for these large corporates, who are always looking for opportunities to solve million dollar problems that they face daily.
Firstly, their sole reason for buying your solution is that it allows them to solve a problem cheaper and faster than they could internally. Let’s hypothetically say that you are going to sell them a product for $30-50K per year. It may cost the corporate four or five times more to do it internally because of time input and may distract them from other high priority projects that their internal software development teams, who could build it, are focused on. They will likely start by purchasing a license, but if it is possible that your solution could solve even larger problems for them – for example penetrating a new market, then investment and acquisition become a possibility.
Enterprises will usually have a specific department whose job is to create and source innovation. This group of people are literally paid to find innovative tools and solutions to improve the way the company operates and keep it agile. This is going to be your best route forward, as they will be “expecting” you to reach out – as long as it’s relevant. Do your research on this group and prepare documentation for them to circulate internally.
4. Find your champion in the organization
In your initial meeting with your champion, as much as you’d like to pitch your product, you first need to listen to their problem around which you build your solution. Remember ultimately that if you’re not solving the organization’s problem they will just ask you to go away. It pays dividends to do some research in this department. If it’s a public company, you will have a bounty of intel to work with, which will help you identify goals, budgets, past performance and more.
The early adopter in the organization has to sell the concept up the value and management chain. You have to arm them with enough knowledge of your product so that they make the choice to use your product over hundreds of others that have been pitched to them.
Bear in mind that they also have a priority of problems that they are trying to solve each month. When you do find your champion, you need to equip them with materials and information to sell your product on internally. Remember that if they are championing your product they are also becoming one of your sales team.
Your materials should directly address the following questions:
- How your product addresses the specific departments challenges
- How your product fits within their current systems and processes – shouldn’t require radical change initially
- Who your product benefits and what measurable ROI can be obtained from its usage initially and further
- The investment required initially and routes to expansion – the pricing strategy should match the buying process of the enterprise (adjust your plans to fit their needs)
Failure to address the above challenges could leave you in limbo – with no clear understanding of a path forward or the costs/benefits to the company, you are likely to fade into obscurity. Make sure that you establish clear next steps from this point – even if the early adopter doesn’t know them, suggest them. It is highly unlikely that they will have a clear path in front of them, so they will need your help to guide this forward.
5. Get your timing right
If the timing isn’t right, it isn’t right. It is almost impossible to move a large enterprise when they are not in a position to consider your offer, conversely, when they are, things can move very quickly and you will wish that you had prepared the groundwork beforehand. This is a critical question to ask and understand – how important is solving this problem now to your customer? What other competing interests are there at this point?
If you are going to sell to a large company and they don’t have a function of an innovation department or a person who sources early innovative products, you probably shouldn’t even try to approach them. You could just end up chasing your tail for a very long time to try to get their attention. In some cases, it could take up to two years to get to a decision, as you wait on budget cycles and availability.
As a rule, never present a solution until you’ve fully understood your client’s problem.
6. Urgency close
With B2B startups, it is very rare that you will have a real time based urgency for a decision. In many cases, you will need to create this urgency when you present your solution. .
Here are three ideas that any B2B company can use, listed from strongest to weakest:
- Meeting a time-based goal/ KPI that they have shared
- Including additional services to your offer for a limited period
- Discounting your offer for a select period
Ultimately, those who make a decision on a B2B purchase do so because it aligns with their personal KPIs and will help them either gain a promotion or bonus or prevent a demotion or sacking. No one is buying B2B for the fun of it. Bearing this in mind, when you map out all the people making decisions across the company, you should be baking in an incentive that aligns with a purchase decision now, rather than later.
When it comes to a B2B Startup, too much time thinking equals inactivity and inactivity equals failure.
